The Objectives and Goals of Remedies in Section 2 Cases (9:30 A.M.–12:00 P.M.):

Robert W. Crandall is a senior fellow in economic studies at the Brookings Institution.

David A. Heiner is the vice president and deputy general counsel for antitrust at Microsoft Corporation.

Per Hellström is chief of Unit C-3 at the European Commission’s Directorate General for Competition.

Abbott (Tad) Lipsky
is a partner at Latham & Watkins LLP and a former Deputy Assistant
Attorney General at the Department of Justice’s Antitrust Division.

Structural Versus Conduct Remedies (1:30 P.M.–4:30 P.M.):

Richard A. Epstein
is the James Parker Hall distinguished service professor of law,
faculty director for curriculum, and the director of the law and
economics program at the University of Chicago Law School.

Franklin M. Fisher
is the Jane Berkowitz Carlton and Dennis William Carlton professor of
microeconomics, Emeritus, at the Massachusetts Institute of Technology.

Andrew Joskow
is senior vice president of NERA Economic Consulting and a former
Deputy Assistant Attorney General at the Department of Justice’s
Antitrust Division.

Dietrich Kleemann
is the head of the task force on ex post assessment of merger decisions
at the European Commission’s Directorate General for Competition.

John Thorne is senior vice president and deputy general counsel at Verizon.

March 29 Session

Remedy in the Face of Technological Change (9:30 A.M.–12:30 P.M.):

Michael Cunningham is general counsel at Red Hat Inc.

Renata B. Hesse is a partner at Wilson Sonsini Goodrich & Rosati.

Marina Lao is a professor of law at Seton Hall Law School.

William H. Page is the Marshall M. Criser eminent scholar at the University of Florida’s Levin College of Law.

Howard A. Shelanski
is an associate dean and a professor of law at the University of
California, Berkeley, Boalt Hall, and the director of the Berkeley
Center for Law & Technology.

Yesterday, the Global Competition Review reported
(password required) that Hong Kong likely will introduce
a competition law. The Report on public consultation on the way
forward for Hong Kong's competition policy (available
here) lays out a blueprint for the law including its rationale, functions and
answers to key questions.

I think that the possible introduction of a competition law in Hong
Kong and the recent adoption of a competition law in Singapore
tells us something very important about the role of competition policy in the
global economy. These two jurisdictions often top various lists of the
most market oriented economies in the world. These jurisdictions also
tend to be among the most trade open economies. Yet, even in both of
these jurisdictions, there is a sense that there is a need to create an agency
to combat monopoly power and coordinated anti-competitive practices because the
market cannot self correct easily against such practices. The Singaporean
competition law contains exemptions for state owned enterprises from the
law. My hope is that Hong Kong does not follow
this approach. Public restraints of competition may in fact be worse than
private restraints because once such legislation/regulation is introduced, it
becomes far more difficult to eliminate such anti-competitive conduct due to
public choice problems.

Abstract: Retailers in the consumer goods industry often
rely on a leading manufacturer for category management, a form of manufacturer-retailer
collaboration referred to as category captainship. There are reported success
stories about category captainship, but also a growing debate about its
potential for anti-competitive practices by category captains. Motivated by
conflicting viewpoints, the goal of our research is to deepen our understanding
of the consequences of such collaboration initiatives between the retailer and
only one of its manufacturers. To this end, we develop a game theoretic model
of two competing manufacturers selling through one retailer that captures the
basic tradeoffs of using category captains for category management. We consider
two scenarios that are in line with traditional retail category management and
category captainship. In the first scenario, the retailer is responsible for
managing the category and determines retail prices and assortment. In the
second scenario, we assume that the retailer delegates part or all retail
category management decisions to one of the manufacturers in return for a
target category profit, and implements its recommendations. We compare these
two scenarios to investigate the impact of the transition on all stakeholders
in the supply chain. We conclude with design recommendations on the scope and
structure of category captainship.

I would be remiss if I did not mention Josh Wright’s
substantial and important recent contributions in the analysis of competition issues in supermarkets. You can download his works here.

[T]he government will have an “expert independent panel” do a
comprehensive review of Canada's competition policies and report –
before next year's budget – on options for future legislative amendments, the budget said. It cited the industry minister's policy
direction to the Canadian Radio-television and Telecommunications
Commission – instructing it to rely on market forces as much as
possible – as a good start.

A new working paper suggests that antitrust arbirtration cases will tend to follow an EU rather than US law model. The authors of the paper, Arbitration of Antitrust Claims in the United States and Europe, are Niccolo Landi and Catherine Rogers. The paper can be downloaded here.

ABSTRACT: Today, most countries have relinquished antitrust claims
to the jurisdiction of arbitrators. While the expansion of arbitral competence
can be seen as a global trend, it has not been an entirely uniform trend. The United States was the first country to allow
international arbitrators the power to resolve statutory claims that implicate
public policy, starting with securities fraud and antitrust claims, but later
extending to RICO claims, claims involving patent validity and employment discrimination.
In allowing these claims to go to arbitration, the U.S. Supreme Court
originally suggested that the public policy interests implicated in antitrust
arbitration can be safeguarded during award review, but that dicta has proven largely
illusory in practice.

Meanwhile, other countries, particularly those with a civil
law tradition in Europe, have been more circumspect and
more circumscribed in allowing arbitration of antitrust claims in the first
place, and more active in reviewing awards to ensure adherence with statutory
objectives. While there is extensive commentary regarding the risks of allowing
arbitration of mandatory claims, our focus in this Essay is instead on the narrower
issue of the effect that different national approaches to arbitrability and
award review have on competing national antitrust policies.

For many disputes, more than one antitrust regime can be
applied because the extraterritorial reach of national antitrust laws of different
jurisdictions overlap in international transactions. Our thesis is that, when
faced with a conflict of laws question about the application of European versus
American antitrust law, arbitrators will be inclined to systematically prefer
European law since they know that failure to do so is more likely to result in
an unenforceable award. The effects of this preference may not be enormous
given noted convergences between U.S. and EU antitrust law, and it is likely be mollified in practice by skilled
arbitrators who can often craft an award that is valid under both legal
regimes. But there are some important areas in which U.S. and European antitrust laws produce different outcomes.

I participated in a wonderful conference at Boalt Hall from March 9-10 on the current status and future of Digital Rights Management, a technological means to prevent the copying and distribution of digital content. DRM has raised important issues in intellectual property (because of the passage of the Digital Millenium Copyright Act in 1998 that legally protects digital rights management) and in antitrust (because of the potential misuse of technological platforms to limit entry and competition). The Boalt Hall Conference focused largely on consumer and competition issues raised by DRM, and there was much discussion scattered throughout the conference on Apple and the iPod technology, especially France's investigation into Apple's use of Fairplay to potentially limit competition through tying the distribution of songs to the hardware medium. All the panels were superb, but particularly noteworthy were the panels (1) on the legal liability of SONY BMG for its software root kit that potentially harmed PC's and downloaded software and spyware without user notification and (2) on the need for legislation to mandate notice on DRM technologies.

I include here the keynote address (Download Rosch.pdf ) by FTC Commissioner Rosch on the consumer protection and antitrust concerns raised by DRM. His talk raised the prospect of Apple iPod potentially creating an application barrier to entry as in Microsoft. I also include slides (Download Bechtold.pdf) of an excellent presentation by Stefan Bechtold of the Max Planck Institute on the role of competition law in regualting DRM.

The conference website which includes other materials can be linked here.

Congratulations to Professor Pam Samuelson and the Berkeley Center for Law and Technology for such a terrific event.

Richard Gilbert continues his important work in the antitrust-IP interface with a new working paper, entitled Competition and Innovation.

ABSTRACT: The
Department of Justice and the Federal Trade Commission have frequently
raised innovation concerns as reasons to challenge mergers. This
chapter surveys the economic theories of innovation incentives and
considers how the theory may inform antitrust analysis for merger
investigations and other conduct that involve innovation. Competition
can promote innovation by reducing the value of failing to invest in
research and development. However, with non-exclusive intellectual
property rights, competition can reduce innovation incentives by
lowering post-innovation profits. There is some empirical support for
these economic theories. The chapter concludes that economics can
inform antitrust analysis for mergers and other conduct that could
affect innovation, although it is important that antitrust analysis
carefully consider the key factors that drive innovation incentives.